Edit |Yuer Lake
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While we enjoy a high-quality modern life, our dependence on electronic devices is also increasing, and the importance of the semiconductor industry is self-evident. In recent years, the sanctions imposed by the United States and Japan on the domestic semiconductor industry, coupled with the downturn in the consumer electronics market, have made domestic semiconductor companies move forward with heavy burdens, and Weir shares are also one of them.
In the first three quarters of this year, Weir's revenue was 1508.1 billion yuan, down 196%；Net profit attributable to the parent company 36.8 billion yuan, down 82 percent year-on-year86%。Fortunately, there are signs of recovery in the consumer electronics industry recently, and the semiconductor track may usher in a new wave of growth in 2024, and Weir shares are expected to get rid of the difficulty of declining performance.
Especially in the CIS track, Sony's current yield rate is low, and production capacity is tightening. Samsung issued a notice last month that the price of its CIS chips will begin to increase next year. This is definitely great news for Weir shares.
It is worth noting that the main cameras of the recent Xiaomi 14 and iQOO 12 series high-end flagship models have adopted the Haowei OV50H sensor under Weir Co., Ltd., and have won unanimous praise. The collective huddle of domestic manufacturers has also made Weir shares turn around, and Weir shares may bottom out in 2024.
The method of mergers and acquisitions eventually became a hundred billion empires
Perhaps many people's perception of Weir shares comes from the acquisition of Beijing Haowei for 15.2 billion yuan in 2019. OmniVision's reputation is well known in the semiconductor industry and among digital enthusiasts. At that time, Haowei far exceeded Weir shares in terms of revenue and profits, and the success of the "snake swallowing elephant" type of merger and acquisition made Weir shares famous, and the market value was among the hundreds of billions.
In 2018, the revenue of Weir shares was only 396.3 billion yuan, and the revenue in 2019 after the merger and acquisition was as high as 1363.1 billion yuan. With the blessing of Haowei, the performance of Weir shares has been soaring. Revenue in 2021 is 2410.3 billion yuan, and the net profit attributable to the parent soared to 447.6 billion yuan.
At the same time, Weir shares have also become the "darling" of the secondary market. In July 2021, its share price once reached 255 yuan shares, hitting a record high, and the total market value exceeded the 300 billion yuan mark. Through this merger and acquisition, Weir and Haowei not only achieved the effect of 1+1>2, but also helped Weir to achieve industrial transformation.
Founded in 2007, Weir Co., Ltd. first started with power management ICs, and later developed to semiconductor discrete devices such as TVS and MOSFETs. As we all know, the semiconductor industry has a long return cycle, and Weir shares adopt the fabless production model, although there is not much financial pressure, but it is difficult to grow revenue rapidly.
In 2013, through the acquisition of Hong Kong Huaqing and Beijing Jinghongzhi, its revenue was able to grow and it had the strength to impact the capital market. In 2017, it was successfully listed on the Shanghai Stock Exchange, but at that time, Weir shares were just semiconductor middlemen who made the difference in the price in the eyes of investors.
In 2018, the revenue of Weir's distribution business was 312.8 billion yuan, accounting for 79% of revenue;The revenue of the semiconductor business was only 8300 million yuan. Although the revenue of Weir shares has risen, it has to face another problem: the gross profit margin of the distribution business is too low and the profitability is not strong.
According to its prospectus, the gross profit margin of ** distribution from 2014 to 2016 were. 1% and 1439%。In the same period, the gross profit margin of the semiconductor business was more than 30%. Therefore, the successful acquisition of OmniVision is of great significance to Weir shares, not only to improve the gross profit margin to solve the profitability problem, but also to transform itself into a "technology stock".
Of course, whether it is the rapid growth of Weir shares or the explosion of the first shares, the fundamental reason is to bring the "cash cow" of Haowei into its command. However, in recent years, the consumer electronics market has been sluggish, the semiconductor industry has entered a downward trend, and Weir shares have also been implicated, and the performance has begun to change.
Revenue in 2022 is 2007.8 billion yuan, a year-on-year decrease of 1678%。Due to misjudgment of industry trends, the inventory price decline loss and cost impairment loss were accrued to 135.9 billion yuan, resulting in a decline in net profit attributable to the parent company to 9900 million yuan, a decrease of 7788%。
In the first half of this year, Weir shares have been busy with low prices to inventory, and the performance has not improved much, and there are no signs of improvement until the third quarter. The reason for this is that although Haowei is among the three giants of CIS, the industry's resistance to pressure is obviously not as good as that of Sony and Samsung, which is also the biggest dilemma of Weir shares.
Ten years of killing the Three Kingdoms, Haowei "lying on the salary and tasting the guts".
In the 90s of the 20th century, image sensors were still the world of CCD. However, since 2000, CMOS technology has continued to mature and has gradually been recognized by the market. In 2005, CMOS has replaced CCD as the mainstream of the consumer market, and OmniVision has become famous because of the back-illuminated CMOS.
Twenty years ago, the popularity of camera phones led to a huge increase in Omnivision's performance. In 2003, one-third of the world's mobile phone image sensors came to Haowei. Especially after becoming the first Apple mobile phone business in 2009, OmniVision's share in the mobile phone market in 2010 was as high as 50%, but today, more than ten years later, Omnivision's market position is not as good as before.
According to Counterpoint data, in the global CIS market in 2022, Sony accounted for 39At the top of the list with a market share of 1%, Samsung topped the list with 249% ranked second, and Howey ranked third, with a market share of only 129%, and Sony, Samsung is still a big gap.
Although Howey has been in the first-line camp for a decade, it is clear that it is under attack. Not only to face hard steel Sony and Samsung, but also to beware of Gekewei and onsemi's counterattack, it can be said that life is not easy.
So why did Howey fall from the world's first brother to the embarrassing situation it is today?Ostensibly because of Apple's abandonment, in fact, it is because of technological backwardness.
In 2012, Sony launched the first stacked CMOS IMX135, and in the same year, Apple's main camera no longer used the OmniVision solutionIn 2013, Samsung released Socell technology for the first time to seize the CMOS market for mobile phones. At this time, Haowei's back-illuminated technology has lagged behind Sony and Samsung, losing the high-end market of mobile phones, and has been reduced to a "secondary camera".
So in the past ten years, OmniVision has been catching up with Sony and Samsung, both in terms of technology and market. After the merger and acquisition, Haowei can use the channels and customer resources of Weir shares to enter the domestic mobile phone market and increase market share.
Technically speaking, in recent years, the gap between OmniVision and Samsung and Sony has become smaller and smaller. For example, the OV64B has become the standard main camera in mid-range mobile phones, and the OV50H has a strong battle with Sony's high-end IMX989.
And with the support of Xiaomi, Huawei, vivo and other manufacturers, Haowei has made small achievements in the high-end market. Haowei's bright sword will naturally make Weir shares perform **. However, it is worth worrying that as orders surge, its production capacity will also be severely tested.
The reason why Sony and Samsung have become the duopoly of the CIS track is that in addition to having strong R&D capabilities, they are both IDM models, that is, self-developed and self-produced. Having a complete wafer factory is an advantage that neither OmniVision nor Weir shares have.
Although OmniVision has always maintained a good cooperative relationship with TSMC, SMIC and other foundries to ensure that production capacity has no worries. However, once the semiconductor industry enters a downward period due to external factors, there is no possibility of downward adjustment of Weir shares without factories.
Last year's inventory surge and declining performance are the best examples. However, in any industry, risks and opportunities coexist, and the CMOS business of Weir shares is not limited to the mobile phone track.
Diversified layout, looking for the third pole
Throughout the development process of the past ten years, Weir has been extending its business scope and developing in the direction of diversification. From discrete devices to semiconductor distribution, the layout of SoC, digital TV, RF chips and now the merger and acquisition of OmniVision to enter the CIS field, Weir shares have a very clear idea, using their own customer resources and channels to build a huge semiconductor empire through business associations.
At present, the three major business systems of Weir Co., Ltd. are: image sensors, touch displays and analog chips. Among them, the simulation business is its traditional strength, which has touched the ceiling of the industry. In addition, the technical threshold of discrete devices such as TVS is low, the business fragmentation is serious, and the growth space is limited. Its key development direction is still in CIS and touch display.
CMOS technology is widely used, and mobile phones are just one of the major categories, which have a very broad demand in notebooks, medical, automotive and other fields. For example, the DJI Mini 3's CIS comes to Pride. In the fields of security and automobiles, Weir shares have also achieved the head position.
Especially in recent years, under the trend of automotive intelligence, the automotive CIS market has grown significantly, which has also brought more development opportunities to Weir shares. For example, last year, Weir shares once again spent 4 billion yuan to hold a stake in Beijing Junzheng, its intention is very obvious, with the help of Beijing Junzheng's advantages in the field of automotive microprocessor chips, and a deep customer base to extend the automotive CIS track.
The automotive CIS business has also become a new growth point. In the first half of this year, the revenue of Weir's automotive CIS business was 190.4 billion yuan, a year-on-year increase of **1887%。Although the increase in the automotive CIS market is large, it is not easy for Weir shares to gnaw on this cake.
At present, onsemi benefits from the first-mover advantage and aggressive strategy, seizing about half of the global automotive CIS market. Although Sony's market share is smaller than that of Vail's shares, it occupies the high-end market. At the same time, the strength of traditional giants such as STMicroelectronics and Samsung cannot be ignored, and domestic manufacturers such as Geke Micro and BYD have also begun to rise.
In the field of touch display, it can only be said that Weir shares are still in their infancy. In 2020, Vail shares were 1$2 acquired Synaptics' Asian business and entered the TDDI space. In 2022, its touch display revenue will be 14700 million yuan, but with the weakening of the electronic consumer market, the revenue of touch display in the first half of this year was only 6600 million yuan, a year-on-year decrease of 444%。
If Weir shares want to make a difference in the touch display industry, it still needs to go a long way. At the same time, with the implementation of the diversified merger and acquisition strategy, although the semiconductor empire of Weir shares has become stronger, the problem it has to face is that the production line is too wide, the business is too miscellaneous, and the focus track is too much, resulting in a bloated industry. Streamlining and optimization may be the top priority for Weir shares in the future.
Conclusion
There are only two ways for companies to become bigger and stronger: organic growth and external mergers and acquisitions. Obviously, Weir shares chose the latter, which has achieved today's market value of 100 billion. M&A can indeed allow Weir to quickly establish a diversified layout, but how to do a good job in post-merger and acquisition integration and achieve the greatest synergy is its top priority.
At present, the image sensor is still the cornerstone of Weir shares, Haowei focuses on the mid-to-high-end market, and Spicco has formed a complete product architecture for the low-end field. Now Weir shares are not short of technology, but the market. At the time of the recovery of electronic consumption, expand the domestic mobile phone and automobile market, and the performance of Weir shares will have hope of recovery.